Q&A on the Book Lost and Founder

Key Takeaways

Transparency makes you vulnerable, but you’ll earn trust with it. It fosters empathy and communication, and brings people to your side.

Instead of delivering an MVP that customers hate, try to create a more “exceptional” viable product that excites people at a “can’t-live-without-it” level.

When raising capital with venture capitalists, take time to understand their motivation, the odds, the model, and the requirements that it has for you and your business.

Don’t assume that because a model is popular that it’s right for you and your company; beware of getting biased by media and by what surrounds you.

Try to bake customer acquisition into your product and your model, and do things that will build your audience *before* you have a product, to profitably attract new customers.

The book Lost and Founder contains startup stories from Rand Fishkin, founder of Moz. In the book he describes the ups and downs from starting and managing a company, and shares the lessons that he learned.

InfoQ interviewed Fishkin about being transparent, minimum viable products and pivoting, raising capital and funding a tech startup, and asked him what he would do differently when starting another company.

InfoQ: What made you decide to write this book?

Rand Fishkin: One of the most rewarding experiences I’ve had in my career has been the hour long conversations I have had with other founders and early stage team members from the startup world. We go out for a coffee or a beer, or even hop on a phone call, and the sharing pours out. My goal with Lost and Founder was to amplify the reach of those kinds of conversations -- to share the pitfalls and hard decisions and bad mistakes and helpful tips that help us avoid painful missteps and feel less alone.

InfoQ: For whom is this book intended?

Fishkin: This is, most directly, a book for folks who work in the world of technology and the web, who are building (or one day hope to build) new companies. Founders. Cofounders. CEOs. The first 50 employees at a new company.

Those are folks who are willfully doing something scary. The odds are against them. Their path is hard and uncertain. If I can save them from at least making the same mistakes I did, that can save a lot of heartache and failure.

InfoQ: In your book you mentioned that transparency can be hard but it works. Can you elaborate?

Fishkin: Transparency is fundamentally about sharing things that are uncomfortable, that most people don’t share. The positive power is in earning trust and preventing people (your team, your community, your customers) from assuming the worst, because you’re already disclosing the worst.

That’s incredibly hard because it makes you vulnerable. It feels like you’re doing the opposite of what the corporate world has trained leaders to do (be secretive, never admit weakness, cover up failures), but that’s exactly why it works. It surprises people. It brings them to your side. It fosters empathy and communication.

InfoQ: How do customers view Minimal Viable Products and what can we learn from that?

Fishkin: I know lots of founders who say “I need an MVP.” I don’t know any customers who say “I wish someone would build an MVP.” Customers kind of hate MVPs. They mostly suck because they just barely do their job. An MVP is a way to say “we’ve validated that solving this problem with our product/service is possible”, but it’s usually not a delightful, wonderful experience that has people raving and amplifying. But that amplification is exactly what early stage companies need -- they need people saying “wow! This is 10X better than anything else available and I can’t live without it,” because the barriers to early adoption are so tough.

And if you are lucky enough to earn a lot of visibility and amplification and have thousands of people come look at your product, a crappy MVP can turn off a lot of people who’ll never give you a second chance. That reputation happened to Moz too many times, and that’s why my recommendation is to bias to a more “exceptional” viable product. Produce something that has people truly excited at a “can’t-live-without-it” level before you do your broad marketing launch, even if you’re doing your testing and validation with an MVP. That model has worked massively better for us.

InfoQ: What's your take on pivoting?

Fishkin: Some pivots in a new startup are necessary. New information comes, you react accordingly, and you improve your product or payment model or marketing channels. But the word has come to be associated with the idea that starting something is what matters, and that ideas don’t really matter, it’s all about execution.

In my experience, that’s dead wrong. Poor execution on a great idea can, over time, become great execution. But even great execution on bad ideas can’t always save you or your company. In Lost and Founder, I talk about how too many founders use pivoting as a way to avoid putting in the hard work of validating an idea’s timing, market, opportunity, and ideal structure.

Fishkin: Understand their motivation, the odds, the model, and the requirements for you and your business. And we need to stop glorifying VC. It receives way too much of the credit and the news and the amplification in the startup world, and yet even most venture partners would say that VC is only right for a very tiny handful of companies (and NOT the “best” ones, but rather the ones with very low survival odds, very low founder-happiness odds, who need rocket fuel to make that low-percentage leap to potential monopoly status).

It’s not that VC is wrong or bad. It’s that it’s poorly understood, and chased as the ultimate prize when it should be considered as a potential, but a not-particularly correct or rewarding path for most.

InfoQ: What are your experiences with different ways to fund a tech business?

Fishkin: Well, I’ve only personally raised money for one company so far - Moz. And that was venture capital. But my network is filled with folks who’ve pursued alternative paths, from bootstrapping to micro-VC to angel-only rounds to crowdfunding. What I worry about is that too many founders structure their companies to be forced to raise venture capital and to rely on future venture rounds, too. That’s not the only path, and if we, as a startup community, can amplify more stories about non-venture models (bootstrapped companies, those who’ve raised via crowdfunding, angel-only, micro-funds, etc), I think that’ll mean more people can get a startup off the ground in the right ways for their goals and models.

InfoQ: What are the main things that you learned at Moz when it comes to managing a startup?

Fishkin: So many things… That’s what Lost and Founder is all about!

A few that may be of particular interest:

Don’t assume that because a model (for customer acquisition or funding or managing or anything!) is popular, that it’s right for you and your company. Beware of getting biased by media and what you see/read/hear/are surrounded by.

Many early-stage companies die because they can’t affordably and profitably attract new customers. If you can bake customer acquisition into your product and your model, and do things that will build your audience *before* you have a product, you can skip over a huge pain point.

Product businesses are not inherently better than consulting or services businesses. Don’t confuse what gets press with what brings founders, employees, and customers happiness and success.

People in an organization are attracted to what they perceive to be the path to greater recognition, influence, and compensation. If you make management the only path to get those things, everyone will want to be a manager, and not everyone is cut out for management.

InfoQ: What will you do differently when starting your next company?

Fishkin: I’m planning to fund SparkToro differently, and to keep it smaller for longer and pursue a great product for customers ahead of overall growth in revenue. I’ll also be applying a lot of the lessons learned about product design, marketing launches, how to structure teams, and how to create an environment conducive to great work.

Obviously, I’ll take a lot of lessons from people and experiences that aren’t just my own, but Lost and Founder’s lessons weigh heavily on my mind, and will certainly be ones I will try to stick by in this next adventure.

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